2024-08-24 19:31

US business activity fell in August as the manufacturing sector contracted. Powell confirmed that the Fed will likely cut rates in September. Next week, investors will focus on US core durable goods orders and the Gross Domestic Product. The AUD/USD weekly forecast is bullish. The Australian dollar has strengthened against the dollar following Powell’s confirmation of a September rate cut. Ups and downs of AUD/USD The Aussie had a bullish week as the dollar plunged amid an increase in Fed rate cut expectations. The Fed minutes on Wednesday revealed that some policymakers were confident enough to start cutting interest rates at the last meeting. However, the majority decided to hold and wait for September. Moreover, data during the week showed further weakness in the US economy. Business activity fell in August as the manufacturing sector contracted. This slowdown was evidence that high interest rates were hurting demand. -Are you interested in learning about forex live calendar? Click here for details- On Friday, the dollar plummeted after Powell confirmed that the Fed will likely cut rates in September. According to the Fed chair, the upside risks to inflation have fallen while the downside risks to employment have increased. Next week’s key events for AUD/USD Next week, investors will focus on US core durable goods orders and the Gross Domestic Product. The core durable goods orders will show the state of demand. The previous report showed orders falling by 6.6%. However, economists predict a 4.0% increase in orders this month. Meanwhile, the GDP report will significantly shape the outlook for Fed rate cuts as it will show how the economy is faring. A growing economy will further ease recession fears and give the Fed time to lower interest rates gradually. On the other hand, a weak economy might prompt the Fed to consider more significant rate cuts, further weighing on the US dollar. AUD/USD weekly technical forecast: Bulls approach the 0.6700 resistance On the technical side, the AUD/USD price has made a bullish engulfing candle after breaking above and retesting the 0.6550 key level. This is a sign that the bulls are in the lead. Moreover, the price sits far above the 22-SMA, with the RSI nearly overbought. -Are you interested in learning about forex signals? Click here for details- However, bulls are facing the 0.6700 solid resistance level. A break above will strengthen the bullish bias. Moreover, it will allow the price to revisit the 0.6800 critical psychological level. On the other hand, if the level holds firm, the price might retest the 22-SMA before continuing on its uptrend or breaking below. https://www.forexcrunch.com/blog/2024/08/24/aud-usd-weekly-forecast-powells-remarks-weaken-dollar/

2024-08-23 10:26

The UK flash composite PMI which revealed an increase from 52.8 to 53.4 in August. The pound has gained 2% in August as the dollar weakened. Markets are awaiting Powell’s speech later in the day. The GBP/USD price analysis shows a solid bullish trend as the pound rallies to new highs after positive UK business activity data. At the same time, the dollar was frail as investors gained confidence in a September Fed cut ahead of Powell’s speech. -Are you interested in learning about the forex signals telegram group? Click here for details- On Thursday, the S&P 500 released UK flash composite PMI which revealed an increase from 52.8 to 53.4 in August. Meanwhile, economists had expected a smaller increase to 52.9. The surge in business activity was bullish for the pound, as it indicated a resilient economy, lowering BoE rate cut expectations. The pound has gained 2% in August as the dollar weakened. Recent US data has raised the likelihood that the Fed will cut rates in September. Inflation is consistently easing towards the 2% target. At the same time, the labor market has shown cracks, putting more pressure on the Fed. US central bank policymakers came out on Thursday, supporting a September rate cut. This was a clear shift from their previous cautious tone. With one more inflation report to go, the risk of a major shift in the rate-cut outlook has reduced. Meanwhile, markets are awaiting Powell’s speech later in the day. Experts believe he will echo what other policymakers have said so far. However, investors will focus on his message regarding the size and pace of future rate cuts. A more dovish outlook beyond September might weaken the dollar further, lifting sterling. GBP/USD key events today Fed Chair Powell Speaks Jackson Hole Symposium GBP/USD technical price analysis: Overbought conditions On the technical side, the GBP/USD price is approaching the 1.3150 key level. The bullish bias is strong because the price has traded above the 30-SMA for a long time without pulling back. At the same time, the RSI has traded in the overbought region as bulls maintained massive momentum. -If you are interested in forex day trading then have a read of our guide to getting started- However, as the price made new highs, the RSI has traded sideways, showing bulls have reached the limit. Therefore, bears may be ready to push the price lower and retest the 30-SMA support. Nevertheless, bulls might touch 1.3150 before temporarily giving up control. https://www.forexcrunch.com/blog/2024/08/23/gbp-usd-price-analysis-refreshes-ytd-highs-amid-upbeat-pmis/

2024-08-23 08:59

BoJ’s Ueda reaffirmed his commitment to hike rates if inflation rises sustainably. Economists believe Japan’s central bank will hike rates one more time before the year ends. Powell’s speech might contain clues about the size and pace of future moves. The USD/JPY outlook is mildly bearish as the yen strengthens after hawkish comments from the Bank of Japan Governor Kazuo Ueda. Meanwhile, the US dollar was under pressure ahead of Powell’s speech at the Jackson Hole symposium. -Are you interested in learning about the forex signals telegram group? Click here for details- On Friday, BoJ’s Ueda had to explain before parliament why the central bank surprised markets with a rate hike at the last meeting. He reaffirmed his commitment to hike rates if inflation rises sustainably. Economists believe Japan’s central bank will hike rates one more time before the year ends. The last rate hike caused turmoil in global markets as investors unwound the popular carry trade. Initially, investors borrowed the low yielding yen to buy high yielding US assets. However, when the Bank of Japan started tightening its monetary policy, investors panicked. However, Ueda’s tone showed policymakers were ready to keep increasing borrowing costs. Meanwhile, in the US, Fed policymakers on Thursday supported the outlook for a rate cut next month. They dropped the previous cautious tone, indicating confidence that inflation will reach the 2% target. At the same time, markets are implying a 73.5% chance the central bank will cut rates by 25 bps. The focus is now on the Jackson Hole symposium. Powell’s speech might contain clues about the size and pace of future moves. Investors will likely react more to clues about policy after September. USD/JPY key events Fed Chair Powell Speaks Jackson Hole Symposium USD/JPY technical outlook: Price consolidates around 0.382 Fib On the technical side, the USD/JPY price has risen to retest the 30-SMA resistance. However, the bias remains bearish since it has stayed below the SMA and the RSI is slightly under 50. Nevertheless, there is little enthusiasm to make large swings. -If you are interested in forex day trading then have a read of our guide to getting started- Neither bears nor bulls are ready to push the price too far away from the SMA. This is a sign of indecision. At the same time, the price has remained near the 0.382 Fib level. If bears regain momentum, USD/JPY will bounce lower to the 142.56 support level. Otherwise, it might break above the SMA to retest the 149.01 resistance. https://www.forexcrunch.com/blog/2024/08/23/usd-jpy-outlook-uedas-hawkish-stance-lifts-yen/

2024-08-22 10:19

The dollar fell after Fed minutes confirmed expectations for a Fed rate cut in September. Eurozone business activity strengthened in August. Negotiated wage growth in the Eurozone eased in the second quarter. The EUR/USD outlook is optimistic as the dollar remains fragile after dovish Fed minutes. However, the euro fluctuated Thursday morning after mixed economic reports from the Eurozone. -Are you interested in learning about the forex signals telegram group? Click here for details- The general trend for EUR/USD remained up as Fed minutes confirmed expectations for a Fed rate cut in September. Policymakers were ready to start lowering borrowing costs if economic data met expectations. July inflation data came out after the Fed policy meeting and showed an expected easing to 2.9%. Therefore, there is little holding the Fed back from cutting interest rates. As a result, the dollar has collapsed, allowing the euro to reach new highs. Meanwhile, data on Thursday showed that Eurozone business activity strengthened in August, further boosting the euro. The composite PMI rose from July’s 50.2 to 51.2, while economists had expected the figure to drop to 50.1. This report reduced pressure on the European Central Bank to cut interest rates. However, a separate report revealed that negotiated wage growth in the Eurozone eased in the second quarter. The figure fell from 4.74% to 3.55%. This is a key measure for the ECB and affects the outlook for rate cuts. Slow wage growth reduces economic demand, piling pressure on the central bank to lower borrowing costs. Currently, markets imply an over 90% likelihood of an ECB rate cut in September. Moreover, the central bank might cut again in December. EUR/USD key events today US unemployment claims US flash manufacturing PMI US flash services PMI EUR/USD technical outlook: Indecision signals looming retreat On the technical side, the EUR/USD price has paused its rally near the 1.1150 resistance level. Bulls have moved steeply from the 30-SMA, breaking above resistance levels. The bullish bias has strengthened with the price well above the 30-SMA and the RSI in the overbought region. -If you are interested in forex day trading then have a read of our guide to getting started- However, price action shows indecision at the 1.1150 level after such a strong move. The price has made small-bodied candles with large wicks, indicating that neither bears nor bulls are strong. It also indicates exhaustion of the previous move. Therefore, the price might soon fall to retest the 30-SMA support. https://www.forexcrunch.com/blog/2024/08/22/eur-usd-outlook-dollar-weakens-euro-ranges-on-mixed-data/

2024-08-22 09:14

Markets are fully pricing in a 25-bps September Fed rate cut after dovish FOMC meeting minutes. Oil prices fell on Wednesday amid growing concerns about China’s economy. Investors moved to fully price another Bank of Canada rate cut in September. The USD/CAD forecast leans bearish, with the dollar on the back foot after dovish FOMC meeting minutes. Investors are more convinced that the Fed will implement the first rate cut in September. At the same time, Canada’s inflation data has raised the likelihood of a Bank of Canada rate cut in September. -Are you interested in learning about the forex signals telegram group? Click here for details- Fed minutes released on Wednesday showed that policymakers were ready to lower borrowing costs in September if data came in as expected. It clearly indicated confidence that inflation will reach the 2% target. Since inflation met expectations in July, investors are convinced policymakers will vote to cut rates next month. As a result, markets are fully pricing in a 25-bps rate cut. The focus now shifts to Powell’s speech tomorrow. If he signals a rate cut, the dollar might continue falling, benefiting the Canadian dollar. The CAD has strengthened significantly this week despite a drop in oil prices and easing inflation in Canada. Notably, oil fell on Wednesday amid growing concerns about China’s economy. China’s fragile recovery has clouded the outlook for oil demand, and most experts have downgraded their forecasts for global demand. Nevertheless, the loonie gained amid the US dollar’s weakness. Meanwhile, data on Tuesday revealed that Canada’s July inflation dropped to a 40-month low of 2.5%. After the report, investors moved to fully price another Bank of Canada rate cut in September. However, investors have already priced this outcome. Consequently, the data had little impact. USD/CAD key events today Unemployment Claims Flash Manufacturing PMI Flash Services PMI USD/CAD technical forecast: Price gets oversold below 1.3601 On the technical side, the USD/CAD price is in freefall and recently broke below the 1.3601 support level. Since bears took over when the bullish trend peaked, the price has traded below the 30-SMA. At the same time, the RSI has traded below 50, supporting bearish momentum. -If you are interested in forex day trading then have a read of our guide to getting started- At the moment, the RSI is in the oversold region, indicating extreme bearish momentum. Since USD/CAD is oversold, bulls might resurface for a pullback to retest the 30-SMA. However, the price might reach the 1.3550 key level before that happens. https://www.forexcrunch.com/blog/2024/08/22/usd-cad-forecast-greenback-falters-post-dovish-fed-min/

2024-08-21 10:08

Fed policymakers have gradually gained confidence that inflation will reach 2%. Markets are pricing a 50-bps or 25-bps rate cut in September. On Tuesday, ECB’s Olli Rehn said that the central bank should cut rates in September. The EUR/USD forecast shows increased bullish momentum as the dollar extends its decline against the euro amid increased Fed rate cut expectations. The euro rose despite an ECB official calling for the central bank to cut rates in September. -Are you interested in learning about the forex signals telegram group? Click here for details- The euro has surged recently as investors fully priced in September’s first Fed rate cut. Initially, ECB policymakers had been more dovish than the Fed. Consequently, the ECB was among the first central banks to cut interest rates. Since then, policymakers have taken a cautious tone as inflation has stalled. Meanwhile, Fed policymakers have gradually gained confidence that inflation will reach 2%. At the same time, markets are pricing a 50-bps or 25-bps rate cut in September. However, there is a higher chance the Fed will implement the smaller cut. The US economy has slowed down significantly. However, like last week’s retail sales report, there are still pockets of strength. Consequently, the Fed might opt for a more gradual pace of rate cuts. Meanwhile, ECB’s Olli Rehn said on Tuesday that the central bank should cut rates in September due to the recent weakness in the Eurozone economy. He became one of the first officials to clearly guide the future. Economists believe the European Central Bank will cut rates in September and December. Market participants eagerly await the Fed minutes for more guidance on the rate cut outlook. Furthermore, Powell’s speech on Friday will likely increase market volatility. EUR/USD key events today FOMC Meeting Minutes EUR/USD technical forecast: Bears could return after the solid rally On the technical side, the EUR/USD price is in a well-developed bullish trend. The price has made a series of higher highs and lows. At the same time, it has respected the 30-SMA as support, bouncing higher every time it revisits the line. Meanwhile, the RSI trades in the overbought region, indicating massive bullish momentum. -If you are interested in forex day trading then have a read of our guide to getting started- The price recently broke above the 1.1050 resistance level. Bulls are now eyeing the next hurdle at the 1.1150 level. However, the price has been on a solid move without pausing. Therefore, bears might soon overpower bulls to retest the 30-SMA before the uptrend continues. https://www.forexcrunch.com/blog/2024/08/21/eur-usd-forecast-dollar-dips-with-fed-rate-cut-on-horizon/